First time buyer mortgage. Big overdraft but large deposit. Advice please!!

Jlt_1810

My partner and I are looking into buying our first home in the next few months. Unfortunately up until tho month I have been on a temp weekly pay contract where I currently work (I have now been given a Permanent contract) and this has meant my overdraft now stands at £2000. However my experian credit report shows as "fair" and I have no outstanding credit cards or loans, and I have a deposit of 45,000 to put down (it is in inheritance and cannot be used to pay off my overdraft). I am just wanting to find out how likely it is that we will be accepted for a mortgage on a property valued at £145,000. Any advice would be great!

olly300

No advice can be given as Experian and other credit company's ratings aren't worth anything. Mortgage providers have their own way of scoring you due to your job, type of employment, etc.

You need to talk to the mortgage company or the mortgage broker, and see what they say.

EMac_2

I'd say you have a pretty good chance since you have a big deposit to put down. If an underwriter looks at the bank statements they will not like the fact you are in overdraft all the time and be concerned whether you are living within your means. A broker would be able to make a case to the lender especially if you will be paying the same or less for the mortgage than you do on rent and explain the reason for the OD and how it will be reduced in the near future. If the OD is the only negative I think you have a good chance. Best of luck

Thrugelmir

You need to sort your finances first. As a poor credit history and a gifted deposit won't give any confidence.

DevCoder

If you are constantly in your overdraft then your outgoings exceed your incomings.

A gifted deposit wont hide that. You need to get rid of the overdraft else all the underwriter will see is that you might not even make your first payment.

shonzyd

Theres a different between dipping into your overdraft now and again, and living in it. I ditto previous advice to clear it first.

Whats the rush? have you put an offer on a house?

p.s i am not a mortgage broker, just offering my opinion

Jlt_1810

Hiya we haven't put an offer in yet but need to move out by the end of summer as the house we are in currently is going on the market soon (we are living my partners parent)

lee111s

Pay off your O/D asap.

Wh05apk

You will be fine as long as you have stayed within the overdraft limits, having an overdraft is only a sin on this forum, lenders do not think the same, some now will take the overdraft as a commitment, reducing your potential borrowing accordingly.

goldmask

Wh05apk wrote: »

You will be fine as long as you have stayed within the overdraft limits, having an overdraft is only a sin on this forum, lenders do not think the same, some now will take the overdraft as a commitment, reducing your potential borrowing accordingly.

Maybe it's because that you only want to get him a mortgage, earn your comission and then move on. But other people are more concerned that he will not be able to handle THE biggest financial commitment in his life, considering he is living beyond his means for considerable period of time.

Thrugelmir

Wh05apk wrote: »

You will be fine as long as you have stayed within the overdraft limits, having an overdraft is only a sin on this forum, lenders do not think the same, some now will take the overdraft as a commitment, reducing your potential borrowing accordingly.

No sin. People can run their personal finances as they wish. However if they wish to apply to borrow thousands of pounds. Then they need to realise that financial institurtions play by different rules.

In a market where demand for credit exceeds supply. Then lenders can adjust the bar to what ever level they wish to filter out applications.

Presenting oneself in the best possible manner therefore makes financial sense.